Losing Streaks Snapped & Earnings Action! – Monday Morning Market Memo – April 29, 2024

Losing Streaks Snapped & Earnings Action! – Monday Morning Market Memo – April 29, 2024

The major stock market averages all gained ground last week.  The Dow Jones Industrial Average rose .7% to 38,240.  The Standard & Poor’s 500 Index jumped 2.7% to 5,100 – snapping a three-week losing streak.  The NASDAQ Composite led the way, rising an eye-popping 4.2% to 15,928 – snapping its four-week losing streak.  For the S&P 500 and Nasdaq, this was their best weekly performance since November.  Investors were able to shrug off some higher-than-expected inflation data, and instead focus on some high-profile earnings beats, powering the market higher.

The core Personal Consumption Expenditures Price Index, the Fed’s preferred inflation reading, came in a notch above expectations.  This reinforces the belief inflation is proving to be sticky – solidifying market opinion there will be less interest rate cuts by the Federal Reserve, and that they will come later rather than sooner.  Inflation and a delay in interest rate cuts has been the market theme for some time now, and we are quite frankly looking for something fresh to write about.  Coincidentally, market activity now leads us to discuss earnings action, beginning with Chipotle Mexican Grill.

Aside from being fresh, Chipotle served up a hot earnings report and shareholders enjoyed the taste of a 6% gain in their stock price.  Microsoft stock gained almost 2% after the software company posted both earnings and revenues ahead of expectations.  Alphabet was the highlight of the week, after the company spelled out better-than-expected profits, its first ever dividend, and a stock buyback.  The stock jumped 10% and its market cap surpassed $2 trillion for the first time ever.  Tesla shares reversed their downtrend and charged 12% higher after the company announced it would introduce new models by early next year.

On the downside last week – META Platforms shareholders were frowning as the stock fell over 10% after management announced a ramp up in spending and disappointing guidance.  Caterpillar shares moved lower, sinking 7%, as investors think demand may have peaked.  Intel shares got chipped away at, after the company forecast second quarter revenues and earnings below consensus estimates.  As to overall earnings so far……

For the first quarter of 2024, with 46% of S&P 500 companies reporting actual results, 77% of S&P 500 companies have reported a positive EPS (Earnings Per Share) surprise and 60% of S&P 500 companies have reported a positive revenue surprise – according to FactSet.

The earnings parade continues in the week ahead, the busiest week of earning season, with about one-third of S&P 500 companies scheduled to announce results.  Reports from Apple and Amazon.com will lead the way, being in the spotlight and highly anticipated.  In addition to a barrage of earnings reports, we’ll also be tracking Friday’s release of the April Jobs Report, with consensus estimates of 250,000 jobs being added and the unemployment rate coming in at 3.8 percent.  Get ready for another busy week!


As always, don’t hesitate to contact us with any questions or if you would like to schedule a meeting.


All the best – Southport Station Financial Management, LLC